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Current Affairs- Business Roundtable: Purpose of a Corporation, March 19, 2020, 11:00 EDT

DMA Current Affairs.  The Purpose of the Corporation hosted by Bob Baker
We have licensed audio/video conferencing software and are going to (try to) hold the Current Affairs meeting over the internet.
As always, you should review the material in advance on the website:
You should keep the post open to follow Bob’s opening remarks.
The meeting will start at 11:00 EDT.
We’ve had some issues with connectivity.  It could that the company’s capacity is overwhelmed – many, many people are going on-line or it could be idiosyncrasies with a person’s PC.  (There is no chance it is the skill of the user.)
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United States: +1 (872) 240-3412
Access Code: 132-263-437
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https://www.gotomeet.me/DMAdarien/currentaffairs

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Business Roundtable—Purpose of a Corporation

Pre- August 2019 Maximize Shareholder Value

Corporate Responsibility per Milton Friedman

1970 essay- Maximize Returns to Shareholder

Friedman’s thesis: Corporations are not to make contributions for

“social causes”, shareholders can choose what to give.

Further- Corporations are to obey all laws and regulations.

If corporations make “contributions”, the directors must

conclude such donations create good will and enhance sales.

Current example: Orvis gives 5% of pretax profits for “environmental

causes”. (Could they give 15%?

 

Comments from Harvard Law School Forum
Re: Business Roundtable Statement on Corporate Mission

Corporate Directors have a fiduciary duty to act in shareholder interest
Thus, decisions not in shareholder interest are illegal

Actions taken by directors will be presumed to be in shareholder interest or they would not be taken.
Directors must adhere to the law so that new Legislative mandates may promote or presume to benefit other stakeholders, but at a cost to shareholders.

Overall question:  To what extent do we desire the government to impose
rules that will decrease business profits in order to strive for other benefits

 

What does the Business Roundtable expect or hope to change with revised statement of purpose?

Former “purpose”: “Maximize shareholder Value”

New “purpose”: “Act to benefit all stakeholders”

Stakeholders: customers, employees, suppliers, communities, and shareholders

Possible intentions:

Change corporate reporting on selective topics?

Motivate investments into areas not directly in shareholder interest?

Motivate shareholder resolutions on new corporate action

Bring about new government rules on business actions

Potential areas of Government mandates:  ESG

(Environment, Social, Government)

Action regarding global warming;

Other environment improvement measures

Reduction of income inequality

Increase diversity in management personnel

Impose unnecessary costs for named investments

Establish more “days off” for employees

 

 

 

 

From the WSJ. Financial Advisers Turn to ESG, Warily – WSJ

IEA warns oil companies doing nothing on emissions is not an option
https://eresearch.fidelity.com/eresearch/goto/evaluate/news/basicNewsStory.jhtml?symbols=XOM&storyid=202001191929RTRSNEWSCOMBINED_KBN1ZJ005-OUSBS_1

Larry Fink’s Latest Sermon

Capitalism, Alone’ Review: Inclined Toward Inequality
Capitalism Alone

Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy That Serves All Americans’

https://lucidmanager.org/milton-friedman-corporate-social-responsibility/

https://corpgov.law.harvard.edu/2019/09/26/analysis-of-the-business-roundtable-statement/

https://www.coursehero.com/file/8478280/Purpose-of-the-Corporation/

The Davos Crowd Embraces Big Global Government – WSJ

The ‘Stakeholders’ vs. the People – WSJ

Bloomberg’s Business Nanny – WSJ

Bill Gray passes away


William Olin Gray
After a long battle with Alzheimer’s disease, William Olin Gray passed away December 22, 2019. The Darien resident was 89 years old.

Mr. Gray was born November 7, 1930 to Grace Lansingh Freeman Gray and Hiram Ligget Gray. He grew up in Riverside, CT with his older brother Peter Lansingh Gray and younger sister Nancy Gray Schaeffer, both of whom passed away in 2018. After graduating from the Pomfret School in 1948, Mr. Gray attended Yale University and then the University of Michigan, receiving a Bachelor of Science in Mechanical Engineering at Yale and another Bachelor of Science in Naval Architecture at Michigan, where he studied under Harry Benford.

After winning the youth nationals at the age of fifteen, Mr. Gray had enormous success as a competitive ocean racer. As the navigator of two of the Carina yachts owned by Richard Nye, Mr. Gray won many blue water races, including the trans-Atlantic race to Sweden in 1955 the Bermuda Races of 1952 and 1956, and the Fastnet Races of 1955 and 1957. Mr. Gray was also the tactician of the Weatherly during her 1958 America’s Cup campaign. Mr. Gray was proud of the fact that he visited seven foreign countries by boat before ever flying internationally.

After an honorable discharge from the United States Navy, where he served as a Lieutenant Junior Grade on the USS Courtney, Mr. Gray began his career as a naval architect at the Quincy Yards of Bethlehem Steel in Quincy, Massachusetts. Mr. Gray soon thereafter transferred to Esso Corporation, predecessor to Exxon Mobile, where he eventually became responsible for the corporation’s world wide petroleum fleet. Following the discovery of the Prudhoe Bay Oil Field on the North Slope of Alaska in 1968, Mr. Gray played a prominent role in converting an existing oil tanker, the SS Manhattan, into the world’s first ice breaking oil tanker, in an effort to determine if it was economically feasible to transport petroleum through Canada’s Northwest Passage. Mr. Gray then oversaw tanker safety and intergovernmental relations for the corporation, working diligently with the Coast Guard and various international agencies to improve ship and waterway safety. Mr. Gray held four patents from his work in naval architecture.

A self-taught trombonist and lifelong jazz enthusiast, Mr. Gray founded two Dixieland jazz bands during his lifetime. The first, The Great Atlantic Jazz Band, was so successful that he was eventually replaced by a more experienced musician. Undaunted, Mr. Gray founded The Constitution Jazz Band, which played regularly throughout Connecticut at bars, weddings and festivals and ultimately released two CDs of traditional Dixieland jazz.

Mr. Gray served as a trustee of the Webb Institute and in 2002 received the Emory S. “Jerry” Land Medal for outstanding accomplishments in the Maritime field. Mr. Gray was a member of Saint Luke’s Church of Darien, CT, the Cruising Club of America, the Society of Naval Architects and Maritime Engineers, the Connecticut Maritime Association, the Royal Ocean Racing Club, the Yale Club, Mory’s, the Tokeneke Club, and the Woodway Country Club. Mr. Gray is survived by his wife, Faith Cook Gray, his daughter Elizabeth Porter Gray of Guilford, CT, his son Andrew Wallace Gray of Baltimore, MD, his step-daughter Anne Pragoff Paterno of Chester, VT and his step-daughter Julia Pragoff Grant of Beverly Hills, CA. His daughter, Susan Gray Arana, predeceased him in 2016. Mr. Gray loved being Grampy to his thirteen grandchildren and one great-grandchild.

The family wishes to thank the wonderful caregivers at Waveny Lifecare in New Canaan, CT.
A funeral will be held at Saint Luke’s Church in Darien, CT, at 11:00 a.m. on Saturday, January 25, 2020. Donations may be made in his name to the () or The Seaman’s Church Institute (https://seamenschurch.org/).

 

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